Colorado district first to use market-based pay

A basic economic principle of supply and demand is taking hold in the Douglas County (Colo.) School District. The district is restructuring the pay scale for teachers and educators so the positions that are most in demand get paid more than those in lower demand.

In what is believed to be a first-of-its-kind initiative in K12, the district last school year started using market-based pay for new hires. This year, it will use the new pay scale for all 3,600 teachers. The district’s chief human resources officer, Brian Cesare, who had worked in HR in the private sector, says the idea was simple.

“When I came here [two years ago], I thought, ‘Why are we paying 70 different types of teachers the same kind of salary,” Cesare asks. “We were paying the same salary to the nurse, audiologist, high school calculus teacher, and elementary school teacher.”

He says the step-in-lane salary structure, which has been used for 92 years in U.S. schools, is not tied to performance. Further, research has shown no correlation between a teacher’s time on the job and student performance, he says.

So Cesare created a five-band pay structure, with the harder-to-fill positions, like school psychologists, school nurses, and special ed teachers, getting paid the highest. In the second highest band are middle and high school math and science teachers. Art, social studies, and physical education teachers, and librarians are paid the lowest because those are the easiest positions to fill.

No teacher will get a pay cut. But merit increases will vary depending on lower- and higher-demand positions. Salaries can generally range from $32,500 to as high as $94,000. But salaries also depend on teacher effectiveness in the classroom. And the district can now recognize someone with a certificate in clinical competence for speech language pathology, for example.

And depending on effectiveness, those in lower bands could earn a higher salary than those in higher bands, says Kevin Larsen, school board vice president.

The band structure also can change every year based on supply and demand of teacher positions. “We first look at our ability to pay and then set the increase percents by differentiating based on performance and market position,” Cesare says. The salary increases going into 2013-2014 range from 1.5 percent for the most in demand, partially effective teachers to 8 percent for below-market, highly effective teachers. Ineffective teachers receive no increases, Larsen says.

In 2010, the state abolished traditional tenure protections. And the district doesn’t have a collective bargaining unit with the teachers’ union, Larsen says.

Larsen says there are a range of emotions among the teachers, with some saying, “it’s about time,” some who are worried and others who are downright angry, including some who have already retired or are active in the union. But the board believes having the very best teachers is the most important factor for students to be productive members of society, he says.